ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Monday released a consultation paper proposing various changes to the total expenditure regime (TER) and distribution paradigm for mutual funds and pension funds.
These proposals aim to reduce the burden on retail investors, optimize their returns, inculcate better saving habits and increase retail penetration, a press release said.
The consultation paper is made available on the SECP website for public feedback and comments from stakeholders. The article evaluates the current regime in three parts, including the TER framework for mutual funds, the TER of pension funds and an overview of distribution models.
Evaluating the existing TER frameworks for mutual and pension funds, the document proposes changes to reduce the financial burden on investors, increase their long-term returns and guarantee fairness and transparency in fund managers’ expenses.
The issues that have hindered the growth of the distribution network and affected retail penetration are discussed in the third part of the paper. It further recommends a transformational framework to redesign the distribution model and improve its usability and accessibility for average investors.
The proposed changes are designed to be in line with international best practices and to ensure pension fund participants get the maximum value for their savings.
The SECP is seeking public feedback to introduce regulatory changes aimed at creating a more efficient, transparent and fair system that better meets the needs of investors. Stakeholders can send their comments and feedback to fmd.feedback@secp.gov.pk.
